The use of transaction cards (including debit or ATM cards) for payment of merchandise is ever increasing. When purchasing merchandise using a standard transaction (i.e., credit) card, the purchaser will typically provide the merchant with the card bearing the account number (or the card number and expiration date if the purchase is being made over a telephone or computer network), and the merchant will then seek authorization from the issuer of the credit card to verify that payment will be forthcoming. The request for authorization is conventionally made over high-speed telecommunication links using modern computer data processors. Thus, the merchant will normally receive an authorization response in "real-time." Credit cards and, particularly, credit card account numbers are somewhat standardized, thus allowing a merchant to accept credit cards from a number of credit card companies, such as companies providing credit card services under the marks VISA.RTM., MASTERCARD.RTM. and DISCOVER.RTM., and others, while being connected to a single credit authorization system. The account number of such cards contains information that identifies the sponsor and the particular issuer of the card, such as a local or national bank. This information is necessary to route any authorization request to the appropriate card-issuer using the credit authorization system.
One standard computer network for transmitting authorization requests is the VISA.RTM. credit transaction network. In addition to VISA.RTM. credit cards, merchants connected to this network may seek authorization for approval of transactions involving other credit cards, such as MASTERCARD.RTM. and DISCOVER.RTM. credit cards. The VISA.RTM. credit transaction network includes a plurality of data processors and financial institutions, all interconnected through telecommunication links which, based on a six digit bank identification number (BIN), route all authorization requests to the appropriate card-issuer and all authorization responses back to the requesting merchant.
Competing transaction card issuers are increasingly seeking ways to cultivate and increase the loyalty to, and the use of, their particular cards. Recently, card issuers have begun developing business relationships with merchants, vendors, organizations and others to add value and provide benefits for the holders of such cards. For example, many card issuers have developed affinity programs wherein the holder of a transaction card receives a benefit each time the card is used to pay for merchandise. The benefit may be in the form of a discount off the price of the merchandise, a rebate, frequent flyer mileage points, or reward points which may eventually be redeemed for cash or gifts. Additionally, known affinity programs may provide a cardholder with a membership number which is linked to one or more of the cardholder's credit, debit or ATM cards. The cardholder purchases merchandise using the membership number and, eventually, a debit is recorded against the associated credit, debit or ATM card. Typically, the administrator of the affinity program develops and operates a private computer-based network to allow the merchants to authorize the transaction.
If such affinity programs were able to take advantage of the previously-described existing credit authorization systems, such as the conventional VISA.RTM. credit transaction network, the costs associated with developing and maintaining such affinity programs would be greatly reduced. By using an existing credit authorization system, there would be no need to build a private transaction network, and the participating card issuers, merchants, and customers would have immediate access to established security, authorization, and settlement processes.
Therefore, there exists a need for an improved discount credit network which utilizes an existing credit authorization system, such as the conventional VISA.RTM. transaction network.